DEEP DOWN AND PERSONAL

A key theme in the book is the ever-changing nature of retailing; in particular the relationship and interaction between the retailer and the shopper. This is manifested in the issue of personalisation.

We see this facet everywhere in every-day life. I am never ceased to be amazed by the obsession, not to say fetish that many young people have about their self-image. This is evidenced by the bewildering amount of times they change their profile on Facebook or their endless enthusiasm for taking “selfies” at every available opportunity.

I am not a psychiatrist but I guess an analysis of such behaviour would elicit the response that it is the desire to be unique and be able to differentiate the “self” from friends and colleagues.

This behaviour is also manifested in the quest for personalisation in retailing in general and in shopping behaviour in particular.

In the old paradigm retailers put together a set of offerings that were made available in physical stores for people to browse and make their purchases.

Amazon was in my view the trend-setter in moving away from this rather static and rigid formula. It offered items online but, making use of relevant technology, algorithms and data built on shopper’s initial purchases to get “deep down and personal” with them. They did this initially by providing extra help and guidance through the medium of reviews, shopper’s comments on their experiences of the product and so on. This inevitably led to more focused, personal and customised services, where messages and promptings 9mainly through emails) ensured that Amazon could almost shape, direct and “groom” shoppers towards items that reflected previous purchases. In short we witnessed the emergence of the era of personalisation.

Of course this raises issues as to whether such behaviour is unethical or invasive. We will briefly revisit this later in the blog.

In this initial phase such personalisation tended to occur almost exclusively within the context of online shopping. However in the past couple of years we have witnessed a raft of pure-play retailers and onmi-channel retailers also moving inexorably towards in-store personalisation.

This has occurred mainly through the confluence of technology and “big data”.

It can be strongly argued that this is the “holy grail” for retailers. What’s not to like about a situation where they can engage in predictive strategies based on personalised and focused data that can make shoppers more amenable to shopping with them? What’s not to like about designing and developing a promotional package of brands that are relevant to shoppers and where there is clear and unambiguous evidence that they like such items (based on past shopping behaviour)?

To this end we have seen the emergence of many data and technology firms that specialise in analysing “big data” about shopper’s behaviour and providing expert advice and guidance for retailers.

One such company is RichRelevance Technology. They carried out a detailed survey of 2,000 shoppers based in the UK and the USA in 2016. The focal point of the research was to assess whether shoppers found in-store technologies creepy or cool. The findings make interesting reading. For instance they found that in relation to the following technologies shoppers reacted thus.

Technology which scans products      62 per cent – cool

Open to receiving pop-up offers on devices when entering store – 52% – cool

Fingerprint technology to help with payment and automatic delivery – 47.5% – cool

Digital coupons – 43% – cool

Facial recognition software that targets customers in-store – 75% – creepy

Sales assistants greeting shoppers by name as they enter the store – 75% – creepy.

While shoppers are largely willing to provide basic information on age, gender and so on, they are more cautious about parting with details about income levels, spending habits and so on.

As always I inject a note of caution about such research: it is only a snapshot of one particular point in time and as we know, things move and change rapidly in the context of retailing.

However the results suggest that shoppers express some reservations about technologies such as facial recognition to a large extent. The reality is that retailers are using and may make more extensive use of such technology. An example of potentially invidious use of such technology can be found in the following example. What if a retailer, by using facial recognition, can automatically identify very important customers when they enter a retail outlet?

This category could be described as shoppers who spend a lot in the store, who are attracted by new product lines from luxury branders and who demand a high level of personal interaction and attention from store sales assistants. What’s not to like about a retailer using technology that immediately identifies such a shopper on a store assistant’s tablet and automatically brings up that person’s shopping history, brand preferences and attitudes to special promotional offers?

The shop assistant can immediately drop into a sales pattern where the individual is personally welcomed and greeted and is presented with new offers and lines that the retailer can be sure is relevant and will appeal to that shopper. Is this an invasion of privacy or the maximisation of the shopper’s and sales assistant’s time and efficiency? Ponder on that for a moment. The retailer is more likely to generate a sale and also use the opportunity to cross-sell or up-sell. The shopper (who is already in potential buying mode) is likely to feel wanted and loved by the personalised nature of the interaction with the retailer (via the sales assistant).

Less intrusive examples include interactive outlet maps which pop up on the shopper’s smart phone and which identify those areas within the store that contain items that the shopper has purchased before. This saves the shopper needless effort in trying to identify where these items are located and introduces a degree of personalisation that is potentially welcome and non-intrusive.

What about a situation where a male shopper is standing next to the shirts section in a menswear shop and suddenly on a digital screen the following pops up. “Hi Sean, here is our new line of pink shirts from Ben Sherman that has just arrived” After this pops up the person is exposed to a range of such shirts – with prices and special offers, appearing on a personalised digital screen. This is triggered and generated again from data that the retailer holds on your previous purchases of shirts in that store. Is this invasion or innovation? Is it intrusive? An irritant? Or is it a great way of personalising and deepening the relationship between the retailer and shopper?

My view for what it’s worth is that it can be either intrusive or helpful – depending on the relationship between the perceived benefits and costs to the individual shopper.

Potential benefits can revolve around time savings, potential discounts, extra loyalty points and potentially getting an early opportunity to purchase new lines ahead of regular customers. “Costs” include intrusion, the feeling of “big brother” endlessly influencing your behaviour and so on.

We need to get used to this type of personalisation. It is not going to go away and the “kids” of today are embedded already in this type of technology.

For “oldies” like me we need to get used to it.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s